Forums > Futures Trading > Index Futures > Approach to trading the ES contract

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Old May 11th, 2009, 11:24 PM   #1
Join Date: Feb 2009
Posts: 300
I thought I would do this to provide an orientation for new traders

I prefer no outside comments

Trolls and flamers not welcome and please do not post

I will ask that the moderator remove all such posts.

I will post a general orientation first using the $DJX (Dow Jones Cash)

I will post charts on several times frames and try to tie it all together so that an observer could see a reasonable method of trading the ES contract.

I will being using "pieces and parts" from several threads here at ET. I will try to show how these concepts can be combined to make a systematic approach that actually makes money.

Profitable systems have to include risk management, trade management and position sizing rules. I will add comments about these issues so that a person can see the big picture.
Old May 11th, 2009, 11:29 PM   #2
Join Date: Feb 2009
Posts: 300
Okay then this is to be an approach to trading the ES contract intraday

We start by orienting ourselves to the longer term using Dow Cash Charts

As can be seen on this first chart, we have been in an uptrend since March
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Old May 11th, 2009, 11:32 PM   #3
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On a 60 minute time frame, I have added support and resistance lines.

As you can imagine this is a less objective but no less important part of the system. In my opinion, a trader has to learn to accurately identify support and resistance for themselves.
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Old May 11th, 2009, 11:34 PM   #4
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And here we zero in a bit closer to the intraday action where we can see consolidation happening on the 15 minute timeframe
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Old May 11th, 2009, 11:38 PM   #5
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Finally we look a little bit closer using 5 minute candles. Here we can see price consolidating intraday.

This chart could be used to make decisions for entry and exit
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Old May 11th, 2009, 11:47 PM   #6
Join Date: Feb 2009
Posts: 300
Once you orient yourself to the market on the longer term, you assume that the odds favor one side more than the other.

In this case we believe that the odds favor the long side. Although we take trades on both sides we may size our long positions bigger and we may give them more wiggle room (bigger stops).

One method that works consistently well is to combine signals from several methods to find an entry. When two or more of these signals occur in close physical relationship to each other we believe that the chances of success are increased, because there are likely to be more traders on the trade.

We look for signals using the following sources

1. Market Profile numbers
2. Pivots
3. EMAs
4. Ergodic Indicator
5. MACD indicator
6. Events

Where two or more of these "line up" in close proximity, we call that "confluence" and assign that setup higher odds of success.
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